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Urban Transport Pricing Reform With Two Levels Of Government

Author

Listed:
  • Stef Proost

    (K.U.Leuven-Center for Economic Studies; UCL - CORE)

  • Akshaya Sen

Abstract

This paper analyses two challenges in the reform of urban transport pricing. The first challenge is the construction of an optimal package of urban transport pricing instruments assuming one benevolent government level that maximizes overall welfare. We examine the welfare gains from implementing in succession better parking prices, improved public transport prices and time varying tolling. It is found that parking and tolling are the most important elements of the optimal package and that the alternative policy instruments are sub-additive in their benefits. The second problem studied is the use of these pricing instruments by different government levels. We examine a case where an urban government controls parking fees and the regional government controls the tolling. Although both government levels have different objective functions, we find that the overall efficiency losses in the Nash and Stackelberg equilibria are limited.

Suggested Citation

  • Stef Proost & Akshaya Sen, 2005. "Urban Transport Pricing Reform With Two Levels Of Government," Energy, Transport and Environment Working Papers Series ete0503, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    • Handle: RePEc:ete:etewps:ete0503
    as

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    File URL: https://lirias.kuleuven.be/bitstream/123456789/119304/3/ETE-WP-2005-03.pdf
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    References listed on IDEAS

    as
    1. Stef Proost & Kurt Van Dender, 2001. "Methodology and structure of the urban model," Chapters, in: Bruno De Borger & Stef Proost (ed.), Reforming Transport Pricing in the European Union, chapter 4, Edward Elgar Publishing.
    2. Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 397-412, July.
    3. Richard J. Arnott & Ronald E. Grieson, 1978. "Optimal Fiscal Policy for State and Local Government," Working Paper 291, Economics Department, Queen's University.
    4. Edward Calthrop & Stef Proost, 1998. "Road Transport Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 335-348, April.
    5. Arnott, Richard & Grieson, Ronald E., 1981. "Optimal fiscal policy for a state or local government," Journal of Urban Economics, Elsevier, vol. 9(1), pages 23-48, January.
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    Cited by:

    1. Armelius, Hanna & Hultkrantz, Lars, 2006. "The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial," Transport Policy, Elsevier, vol. 13(2), pages 162-172, March.
    2. Palma, André de & Lindsey, Robin & Proost, Stef, 2006. "Research challenges in modelling urban road pricing: An overview," Transport Policy, Elsevier, vol. 13(2), pages 97-105, March.
    3. Calthrop, Edward & De Borger, Bruno & Proost, Stef, 2010. "Cost-benefit analysis of transport investments in distorted economies," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 850-869, August.

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    More about this item

    JEL classification:

    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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